InvestorQ : Now that the LVB and DBS Bank deal is finally through, what happens to the depositors of Lakshmi Vilas Bank?
vaishnavi mhatre made post

Now that the LVB and DBS Bank deal is finally through, what happens to the depositors of Lakshmi Vilas Bank?

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vidhya Laxmi answered.
6 months ago
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On Wednesday, the NSE announced that the shares of Lakshmi Vilas Bank or LVB would be suspended from trading effective the close of trading on 26 November. AT the same time, the RBI also announced that the depositors of LVB will be migrated as depositors of DBS India Bank effective from 27 November.

That brings an end to the uncertainty and fortunately, the moratorium of 1 month will end in just 1 week. That means; depositors can now access their monies. RBI has clarified that the amalgamation of LVB into DBS Bank will come into effect from 27 November.

The good news is that the depositors’ money is intact. However, the bad news is that it is one more case where the equity shareholders will get nothing and will become the scapegoats in the process.

Effectively, the moratorium on LVB ceases from 27 November. It may be recollected that on 17 November, the RBI had effectively superseded LVB's board and placed it under moratorium with withdrawal limit of Rs.25,000 per account. That will not be applicable from 27 November onwards and it is back to normal for depositors.

The Development Bank of Singapore or DBS will now be the new parent of LVB and that is as of now unlisted. DBS is based out of Singapore and has a massive presence across 18 key markets, with a very strong presence in the Asian region.

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